Credit a ‘report card’ to finances
by William G. Lako Jr.
Columnist
October 19, 2012 01:15 AM | 1979 views | 0 0 comments | 37 37 recommendations | email to a friend | print
William G. Lako Jr.<br>Business Columnist
William G. Lako Jr.
Business Columnist
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As part of keeping your finances in order, you should review your credit history, as it affects many aspects of your financial life. Your credit report is used by lenders to determine loan eligibility, interest rates, and often the rate you will be charged for your automobile, homeowners or renters insurance policy.

You should check your credit report at least once a year. You may consider checking your credit report before a major purchase, before marriage, after divorce or after the death of a spouse. Under federal law, you are entitled to one free credit report a year from each of the three primary credit reporting bureaus: TransUnion, Equifax and Experian. Additionally, residents of Georgia are also entitled to a second free annual report. You can easily request your credit report from annualcreditreport.com.

You should look for items like loans that have been paid that aren’t indicated as such; charge-offs or collections that should have been removed after seven or 10 years, and any credit cards that you had closed but are listed as being closed at the creditor’s request. You’ll also want to keep an eye out for unfamiliar accounts, which could be a sign of fraud.

Once you receive your credit report, your credit score will be available for purchase from one, or more, credit reporting agencies. Resist this offer! Often, these are not the same scores given to lenders when they check your credit. The most important aspect of checking your credit report annually is to ensure it is accurate and free of fraudulent activity — not to have a number to brag to your friends about.

Should you pay for a credit monitoring service? If you are lazy like me, then this service may be well worth approximately $12 a month. While these services generally only alert you to recent credit activity, you are at least receiving email notification immediately when activity occurs. This being said, it will not prevent a thief from applying for credit under your name or protect you against stolen credit cards.

Remember, you should be able to monitor your credit for free by closely checking your bank and credit card statements each month and by checking your credit report. At annualcreditreport.com, you have the choice to order reports from the three credit bureaus at once or separately. Feasibly, you could order your credit report every quarter by requesting a report from a different credit bureau every three months. Remember, Georgia residents are entitled to a free copy of their credit report in addition to the free annual credit reports provided under federal law.

Additionally, you are entitled to a free credit report if you were denied a loan, filed a 90-day fraud alert or received notice that you did not qualify for the best interest rate, as a result of your credit score.

William G. Lako Jr., CFP, is an executive in residence at Kennesaw State University’s Coles College of Business and a principal at Henssler Financial. Lako is a certified financial planner.The MDJ will periodically publish columns from KSU business faculty.
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